A Guide to South Korea’s 4 Social Insurance Programs
South Korea’s Social Welfare Policy & the “Safety Net”
Every developed country has systems set up to make sure that people are taken care of in the event of certain challenges and time periods. European countries are famous for their strong social safety net, but Korea does a pretty good job of delivering a safety net at a reasonable price. Here are some details on the insurance programs and how a good accountant will ensure that you comply with providing these required social welfare programs. The cost of benefits for Korean social insurances are quite high in Korea and it grows each year. Make sure you comply with the constantly changing regulations.
South Korea’s Health Insurance
Run by the National Health Insurance Service (국민건강보험)
The national health insurance service in Korea is very powerful so that the insured person can enjoy Korean health care easily with low costs. The current contribution rate for the employee is about 3.5%, including long-term care insurance, and the rate goes up every year.
South Korea’s Social Security / Pension System
Run by the National Pension Service (국민연금)
The national pension is a defined benefit program for the public. The major type of benefits is “Old-age” pension, which the insured person will get pension payments when he/she reaches 65 years-old. Sometimes, the national pension is paid as a lump-sum amount when the insured person meets certain criteria.
South Korea’s Unemployment Insurance
Run by the Ministry of Employment and Labor (고용노동부)
The unemployment insurance service is quite straightforward. The insurance company pays a certain amount of money for a certain period when the insured person is fired. Also, the insurance company provides various training programs for jobseekers.
South Korea’s Disability Insurance
This program compensates a worker who exposed to a work-related accident for his/her consequent injury or disease on a timely basis, and thereby, subsequently facilitate his/her rehabilitation and return to society. The government recently expanded the scope of accidents for this program. Nowadays, any accidents during commuting to work can be covered under this program. The most distinct difference from the other programs is that only the employer’s contribution is required for this program.